VW, Daimler to sign $5bn Chinese contracts: source

6th January 2011, Comments 0 comments

German car giants Daimler and Volkswagen will ink multi-billion-dollar contracts with Chinese partners Friday during a visit by a top Chinese official, a government source in Berlin said.

"The contracts with Daimler and VW will be more than five billion dollars," the source told AFP on Thursday.

Germany's foreign ministry had said earlier in a statement that contracts would be signed after a meeting between Chinese Vice Premier Li Keqiang and Deputy Chancellor Guido Westerwelle, without giving more details.

Westerwelle, also foreign minister, and Li would discuss "the further development of economic and political ties as well as the continuation of reforms in China and cultural cooperation," the ministry said.

Li, widely tipped to be the next premier, arrived in Berlin earlier Thursday and was set to hold talks with Chancellor Angela Merkel on Friday.

Later Thursday he was due to meet German Economy Minister Rainer Bruederle who in an interview with business daily Handelsblatt ahead of the talks, slammed conditions for Western firms operating in China.

"Improvements need to be made when it comes to access for German firms on the Chinese market," Bruederle said, citing in particular the insurance and banking sectors.

"Foreign firms still complain about a lack of transparency and predictability.

"On my visit to China, I often heard complaints that important regulations were introduced suddenly and without consulting the economic players involved," Bruederle added.

While Chinese legislation is increasingly in line with international standards, there "are failures in implementing this legislation," especially in the provinces, he said.

He praised the Chinese authorities however for "taking our concerns seriously and seeking to improve the investment environment for foreign companies."

Following his trip to Berlin, Li was due in London.

He has already visited Madrid where he said Beijing was willing to buy around six billion euros worth of Spanish debt, daily El Pais cited government sources as saying.

After eurozone members Greece and Ireland were forced to seek bailouts worth tens of billions of euros last year, Spain, together with Portugal, have been seen as next in line in the 17-country currency union to need help.

China and Germany are the number one and number two exporters in the world respectively.

According to Berlin's statistics, Germany exported 37.3 billion euros (48.7 billion dollars) worth of goods to China in 2009, with Chinese exports to Germany worth 56.7 billion euros.

© 2011 AFP

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